How the Pacific Northwest Can Lead in the Face of Federal Clean Energy Rollbacks

Contributed by RNW Staff

The Pacific Northwest has long been at the policy forefront of the clean energy transition. With the recent passage of the One Big Beautiful Bill Act (OBBBA), our region is no exception in facing a pivotal moment. 

OBBBA rapidly phases out the federal tax credits – the Production Tax Credit (PTC) and Investment Tax Credit (ITC) – that have accelerated the deployment of renewable energy, while keeping costs down for rate payers. The OBBBA will also increase overall project costs from new foreign entities of concern (FEOC) rules. And unless states act quickly, these rule changes risk the cancellation of viable projects and ultimately raise costs for customers, jeopardize grid reliability, and slow down clean energy deployment.

The Far-Reaching Impacts of OBBBA:

• Tax credit phase-outs: Wind and solar, the backbone of new generation in our region, lose federal support under aggressive sunset timelines.

• FEOC rules: Starting in 2026, new sourcing restrictions will add further cost and complexity to energy projects (not limited to just renewables), at a time when the energy industry is already facing supply chain challenges.

• Reduced clean energy capacity: Nationally, clean energy additions could decline by around 60% through 2035, representing roughly 600 GW fewer resources coming online.

• Higher costs for consumers: According to research by Energy Innovation, OBBBA could increase annual household energy costs by $140 in Oregon, $55 in Washington, $240 in Montana, and $130 in Idaho by 2035.

• Reliability risks: With growing demand and most of the regional interconnection queue made up of wind, solar, and storage, fewer projects moving forward threatens both state clean energy mandates and reliable service.

What Utilities Are Doing Now

Utilities recognize the urgency. In Oregon, Portland General Electric (PGE) has already issued a Bilateral Call for third-party owned Renewable and Hybrid Resources, a streamlined process designed to bring “shovel-ready”, or near “shovel-ready,” projects online quickly to capture tax credit benefits before they expire. PacifiCorp has also accelerated its Oregon procurement process for the same reason.

RNW applauds these proactive steps. Every month matters in the current environment. Capturing the ITC and PTC savings, which we’ve estimated to be worth $400–650 million per gigawatt (for reference, 1 gigawatt could power approximately 876,000 households for one year) protects customers from higher costs in the long run.

What RNW Is Doing

RNW is advocating at the highest levels to ensure states help their utilities move quickly. We are urging decision makers and regulators to support creative and time-sensitive procurement methods.

Our message is clear: while competitive Request for Proposal (RFP) processes are normally best, the extraordinary circumstances of OBBBA call for flexibility. Bilateral calls, expedited RFPs, and clear regulatory signals that allow procurement to move quickly are essential to ensure utilities can secure tax-credit-eligible resources before the window closes.

What States Can Do

Leadership at the state level will determine whether the Pacific Northwest captures the remaining benefits of federal incentives or leaves billions of dollars in savings on the table. States can act by:

• Directing commissions to support urgent procurement: Allow utilities to pursue bilateral calls or voluntary RFPs to bring tax-credit-eligible projects online faster.

• Coordinating across agencies: Governors, utility commissions, and state energy offices must align to reduce barriers to project development.

• Providing flexibility in oversight: Ensure regulatory frameworks don’t unnecessarily slow down utilities that are responsibly and competitively seeking to contract for ITC/PTC eligible resources.

• Planning for the long-term: Remove regulatory, permitting, and market barriers to renewable energy deployment, and continue advancing state clean energy mandates. 

Even with the loss of federal tax credits, renewables remain the most cost-competitive option. Wind, solar, and storage have no fuel costs, are less exposed to price volatility, and can be rapidly deployed under normal circumstances. These resources are critical to meeting state clean energy mandates and building a reliable, resilient grid for the future. Utilities will continue to pursue clean energy, and RNW will continue to advocate for solutions that protect customers, ensure reliability, and accelerate the energy transition.

The federal landscape has shifted dramatically, but the Pacific Northwest can still make progress. With decisive state action and regulatory flexibility, we can capture the remaining benefits of federal tax credits, keep energy costs down, and ensure a reliable, clean grid for decades to come.

Renewable Northwest will continue working with governors, utility commissions, and our members and advocacy partners to keep the region on track.